TRADE INSTRUCTIONS

Date: November 1, 2018
Name: Western Digital
Symbol: WDC (NasdaqGS)
Type: Extend
Extension Period: 3 months 

TRADE RATIONALE

We have reached my original six-month holding period for WDC and frankly, this trade could not have gone much worse. However, I can’t rationalize closing out this position at what I believe is an absurdly low price so I am extending this trade into January to capture the next set of quarterly results.

Currently priced at a little more than five times forward earnings, less than one time sales, and 1.1 times book value, I believe WDC has become grossly oversold (along with the rest of the semiconductor/memory device sector).

That said, I don’t expect to get all the way back to my entry price of $78 in the next three months. However, given its current share price near $45, a return to $60 would represent a 33% gain from where it is now which is better than any other trade I see in the market at this time.